Court: District Court, E.D. New York; December 9, 2018; Federal District Court
Alexandra Axon filed a putative class action lawsuit against Florida's Natural Growers, Inc. and Citrus World, Inc., alleging that the use of the term "natural" on their orange juice products is misleading because the products contain trace amounts of glyphosate, a synthetic herbicide. Axon claims that she relied on the "natural" label when purchasing the juice and argues that reasonable consumers would not expect glyphosate in genuinely natural products. The complaint is based on New York's consumer protection laws and seeks to represent both New York purchasers and a nationwide class. Florida's Natural's motion to dismiss the complaint was granted under Rule 12(b)(6) for failure to state a plausible claim. The FDA has not defined "natural" in food labeling but has a policy suggesting it means no artificial or synthetic substances are added, though it does not cover production methods like pesticide use.
The complaint was filed on July 20, 2018, by Axon, who represents a nationwide class of consumers purchasing Florida's Natural products, including a sub-class of New York residents. Axon alleges four causes of action against Florida's Natural: (1) deceptive practices under NYGBL § 349 (New York sub-class), (2) false advertising under NYGBL § 350 (New York sub-class), (3) breach of express warranty (nationwide class), and (4) unjust enrichment (nationwide class). Florida's Natural sought a pre-motion conference on August 20, 2018, to obtain permission for a motion to dismiss, which the court later authorized. On September 21, 2018, Florida's Natural filed a motion to dismiss based on Rule 12(b)(1) for lack of standing and Rule 12(b)(6) for failure to state a claim, to which Axon opposed.
The court denied Florida's motion to dismiss on standing grounds, affirming that plaintiffs must demonstrate standing under Article III by showing injury in fact, a causal connection to the defendant's conduct, and the likelihood of redress. However, the motion to dismiss for failure to state a claim was granted. The plaintiff bears the burden of showing standing through plausible allegations, and the court accepted all material allegations as true while favorably construing the complaint.
Defendant argues that plaintiff lacks Article III standing, asserting no injury from alleged wrongdoing. Plaintiff counters that she suffered economic injury due to purchasing products at a premium based on misleading labeling. Case law supports that allegations of financial injury from purchasing misleadingly labeled products can establish Article III standing. The defendant also claims plaintiff lacks statutory standing under the New York General Business Law (NYGBL), asserting that mere product purchase does not support a cause of action for deceptive practices. New York courts require more than just a purchase to show "actual injury" under Section 349, but a claim that product prices were inflated due to deception meets this requirement. Plaintiff has adequately alleged injury under NYGBL § 349 and § 350 by stating she paid a premium for products labeled as "natural." Although identifying competing product prices would bolster her claim, the absence of this detail does not negate her standing. Furthermore, the defendant contends that plaintiff lacks standing for injunctive relief, which requires a "real or immediate threat" of future injury. Precedent indicates that past illegal conduct does not suffice for standing in injunctive relief claims without ongoing adverse effects.
Florida's Natural contends that Axon is aware of the alleged misrepresentations and thus unlikely to be harmed by the defendant's actions in the future. However, Axon claims that if the misleading labels were corrected, she would consider repurchasing the products, asserting her standing for injunctive relief due to ongoing injury from the inability to trust the product labels. The court notes that the Second Circuit has not resolved whether a plaintiff can demonstrate standing for injunctive relief under such circumstances. The court finds that Axon has standing to pursue her claims under a damages theory, although these claims ultimately fail as a matter of law, making a decision on her standing for injunctive relief unnecessary.
The defendant's motion to dismiss Axon's claims is granted. In considering the motion under Rule 12(b)(6), the court must accept all factual allegations in the complaint as true and draw reasonable inferences in favor of the non-moving party. The allegations must raise a right to relief above a speculative level, requiring a plausible claim for relief to survive dismissal. Legal conclusions presented as factual allegations do not receive this presumption.
Florida's Natural argues for dismissal based on preemption by the Federal Food, Drug, and Cosmetic Act (FDCA), asserting both express and conflict preemption. Express preemption occurs when Congress explicitly preempts local law, while conflict preemption arises when compliance with both local and federal laws is impossible or local laws obstruct federal objectives. The court finds that neither express nor conflict preemption applies to Axon's claims, thus rejecting the defendant's argument for dismissal on these grounds.
The FDCA, established in 1938, prohibits food misbranding and empowers the FDA to regulate food safety and labeling (21 U.S.C. § 331(a)). The Nutrition Labeling and Education Act of 1990 (NLEA) amended the FDCA to enhance FDA authority over nutrition labeling and nutrient claims, preempting state laws with non-identical requirements (21 U.S.C. § 343-1(a)(2)). The FDCA does not mandate food manufacturers to label glyphosate presence, allowing trace herbicide amounts within specified tolerances (21 U.S.C. § 346a). States cannot set different tolerance levels, with citrus fruit tolerances for glyphosate set at 0.50 parts per million (40 C.F.R. § 180.364(a)(1)), and it is acknowledged that glyphosate levels in the complaint are below this threshold.
The defendant claims that the plaintiff's allegations are expressly preempted by FDA regulations requiring labeling orange juice as "100 percent juice" and allowing "100 percent natural" labeling. However, while the label "100 percent juice" is permitted, the regulation does not allow products under 100 percent juice to be labeled as "100 percent natural" (21 C.F.R. § 101.30(l)). The FDCA does not explicitly authorize the use of "natural" on labels. The defendant also argues that the plaintiff's claims regarding glyphosate disclosure are preempted, asserting that the plaintiff's demands differ from federal law. The plaintiff clarifies that she is not seeking glyphosate disclosure but contends that products containing synthetic substances like glyphosate cannot be labeled as "natural." The court supports the plaintiff's clarification, denying the defendant's preemption argument on this basis.
Defendant cites Gibson v. Quaker Oats Co. to argue that plaintiff's claims are preempted. In Gibson, plaintiffs alleged that the "100% Natural Whole Grain" label was misleading due to glyphosate presence, leading the court to dismiss the claims based on federal preemption under 21 U.S.C. § 343-1(a) and pesticide regulations in 21 U.S.C. § 346a. However, the court finds Gibson distinguishable and unpersuasive. Unlike in Axon, the Gibson plaintiffs sought glyphosate disclosure. Additionally, the court misquoted 21 U.S.C. § 343-1, which specifies that only state requirements not identical to federal ones are preempted. Since the FDA has not established a rule defining "natural," courts, such as in Silva and Ault, have ruled that state law claims challenging the term are not preempted. Specifically, Ault determined that preemption does not apply when plaintiffs seek to remove the term "natural" from labels, as this doesn't conflict with FDA requirements. Consequently, the court declines to adopt the Gibson ruling.
Conflict preemption occurs when compliance with both state and federal law is impossible, or when local law obstructs federal objectives. In this case, the plaintiff's claims do not create such a conflict, as they do not seek any labeling requirements that contradict federal law. Both New York law and the Federal Food, Drug, and Cosmetic Act (FDCA) prohibit false or misleading food labels. The defendant argues for dismissal based on the claim that requiring glyphosate disclosure would undermine the FDCA's goal of uniform food labeling standards. However, since the plaintiff is not demanding glyphosate disclosure but rather the removal of the term "natural," this argument is rejected.
Under New York General Business Law (NYGBL) Sections 349 and 350, "deceptive acts or practices" and "false advertising" are prohibited, necessitating that plaintiffs demonstrate statements likely to mislead a reasonable consumer. The plaintiff contends that consumers do not expect glyphosate in natural orange juice and would be misled by the product labeling. While the question of consumer deception is generally not resolved at the motion to dismiss stage, the court finds the plaintiff's allegation implausible, concluding that reasonable consumers would not interpret "Florida's Natural" as implying the absence of glyphosate. Consequently, the court dismisses the plaintiff's NYGBL claims.
The court finds the reasoning in *In re General Mills* persuasive, where plaintiffs alleged that General Mills misleadingly labeled its Nature Valley products as "Made with 100% Natural Whole Grain Oats," despite containing trace amounts of glyphosate. The court dismissed the claims, emphasizing the difficulty of producing processed food without synthetic molecules. The court noted that glyphosate is widely used as an herbicide, making it implausible for reasonable consumers to believe that a product labeled "Florida's Natural" would be entirely free of glyphosate, especially in amounts below FDA tolerances. The plaintiff's claims differ from other "natural" cases where defendants were accused of including unnatural ingredients, as glyphosate is not an added ingredient but a substance that may be present due to agricultural practices. The court argued that it is more misleading to label a product as "natural" when unnatural ingredients are specifically added, compared to the presence of trace amounts of a common pesticide. The plaintiff claims that *In re General Mills* is an outlier in the Second Circuit regarding NYGBL § 349 and § 350 "natural" claims, but the court finds cases challenging glyphosate's presence to be more analogous than those involving unnatural ingredients.
Plaintiff cites two cases, Tran v. Sioux Honey Ass'n and Organic Consumers Ass'n v. Gen. Mills, to argue against dismissal. The court notes that these cases are from other jurisdictions and not binding, and finds them distinguishable. In Tran, the issue was the interpretation of "pure," not "natural," with the court expressing reluctance to dismiss claims when "100% pure" was labeled on the product. Conversely, Florida's Natural does not claim its products are "100% natural," only containing "natural" in the brand name. In Organic Consumers, while the court allowed a claim regarding misleading "natural" labeling, it involved a product explicitly labeled as "100% Natural Whole Grain Oats." The court concludes that a reasonable consumer would not be misled by Florida's Natural's branding, justifying dismissal of the plaintiff's New York General Business Law (NYGBL) claims.
Regarding the breach of express warranty, Axon claims Florida's Natural breached warranties by not conforming to its promises of being natural. To succeed, a plaintiff must show an affirmation of fact or promise by the seller that induced the purchase and was relied upon detrimentally. The New York Uniform Commercial Code defines an express warranty as any seller affirmation relating to goods that becomes part of the bargain. However, general statements that a reasonable consumer would not interpret as factual cannot support such claims. Given the earlier conclusion that a reasonable consumer would not interpret the brand as guaranteeing products free from trace glyphosate, the breach of warranty claim is also dismissed.
Plaintiff Axon asserts a claim for unjust enrichment against Florida's Natural, alleging that the company's deceptive labeling and marketing enriched it at the expense of the plaintiff and Class members. Under New York law, unjust enrichment applies in unique situations where no contract breach or recognized tort exists, creating an equitable obligation from the defendant to the plaintiff. Axon's claim simply reiterates her other claims based on the same alleged misrepresentations and is therefore subject to dismissal.
The court grants the defendant's motion to dismiss all claims for failure to state a claim, allowing dismissal without prejudice due to the plaintiff's request to amend her complaint if the motion is granted. Although the court considers any potential amendment likely futile, the plaintiff may file a motion to amend within 10 days, including a proposed amended complaint.
The defendant notes that the glyphosate levels in its products are significantly below federal safety limits, a point not contested by the plaintiff. While the plaintiff initially indicated challenges to the processing methods of the products, she clarifies that her claims regarding the term "natural" on the labeling are based solely on the presence of glyphosate. The defendant seeks to strike references to processing methods as irrelevant, but motions to strike are generally disfavored and granted only under strong justification. The court may consider motions to strike at any time, but they are often denied as moot if the judge does not rely on the challenged material.
Plaintiff's claims are focused solely on the glyphosate content in the defendant's products, rendering the defendant's motion to strike irrelevant concerning processing allegations. The request to strike safety-related allegations about glyphosate is also denied as moot since they were not considered in the decision. The court distinguishes this case from Wong v. Newman's Own, where a stay was granted due to FDA proceedings; in this case, no stay is requested, and the claims are dismissed as legally insufficient. The analysis of statutory standing under New York General Business Law (NYGBL) Sections 349 and 350 is identical, requiring that the plaintiff demonstrate consumer-oriented conduct, material misleading, and resultant injury. The court refrains from addressing class standing issues, as they are debated at the motion to dismiss stage. The court assumes the plaintiff does not seek mandatory glyphosate disclosure and does not evaluate potential federal preemption of such a claim, noting that similar arguments have been deemed potentially valid in other cases.
Preemption was found inapplicable as the crux of the plaintiff's claims pertains to the defendant's labeling of products as "Pure" and "100% Pure," rather than the undisclosed presence of glyphosate in honey. The defendant argued that FDA tolerance levels for glyphosate in citrus fruit differentiate the case; however, the key issue is whether products containing glyphosate can be labeled "natural" or "pure." The court noted that the Gibson case erred in interpreting FDA guidance, which does not provide clear directives regarding the term "natural" in relation to pesticides. New York's Agriculture and Marketing law incorporates FDCA labeling provisions against food misbranding, while private rights of action for such claims arise under consumer protection laws like NYGBL §§ 349 and 350. The court also stated that Axon's breach of warranty claim is not preempted, as such claims arise from the manufacturer's voluntary promise rather than a state law requirement. Florida's Natural's defense under NYGBL's safe harbor provisions was rejected because Axon alleges that the label "natural" violates federal law, and since the FDA has not established clear rules regarding glyphosate labeling, the safe harbor does not apply. The consolidated class action complaint includes NYGBL claims, and while Organic Consumers opposes In re General Mills, the distinction is made that General Mills involved the term "100% Natural" concerning whole grain oats, whereas the present case involves the term "natural" applied to the entire product. The court disagreed with the plaintiff's assertion that the brand name "Florida's Natural" inherently implies that the entire product is "100% Natural."
